Introduction

After a turbulent year in British politics, the UK is now clearly charting a momentous course out of the European Union.

Leaving the European Union is likely to have far-reaching implications, particularly for International Banks who have traditionally used London as a gateway for accessing financial services markets in the rest of Europe. What will happen to single market access in the long term remains to be seen.

The European Commission has published forms to be used under the Recast European Insolvency Regulation (Recast EIR).

Insolvency Practitioners will need to be familiar with the forms and the circumstances in which they should be used.

What are the new forms?

In summary, the new forms are:

1. A standard notice form to be used by courts or Insolvency Practitioners to inform known foreign creditors of the opening of insolvency proceedings;

2. A standard claim form to be used by foreign creditors to lodge claims;

A Sheriff at Glasgow Sheriff Court has recently published a judgment showing its approach regarding the role played by a court reporter in an application by a liquidator to seek approval of remuneration.

The note concerned the case of One Optical Limited (in liquidation) (the Company).

This judgment is useful for insolvency practitioners in setting out how a court (in this case Glasgow Sheriff Court) views the role of a court reporter when approving (or otherwise) the remuneration of a liquidator.

In response to the profound market disruption caused by the coronavirus pandemic and to stave off a predicted “tsunami” of corporate insolvencies, the UK Government has announced its plans to enact a series of urgent law reforms, aimed at keeping as many of the affected businesses as possible intact and trading. 

The purpose of this note

The profound business and market interruption already caused by the COVID-19 outbreak has introduced insolvency risks for many otherwise healthy businesses. 

This note summarises proposed insolvency law reforms announced on 28 March 2020 with some commentary on other recent COVID-19 developments in this area, including: 

Company insolvency

When is a company insolvent?

In general terms, a company is insolvent if it is unable to pay its debts as and when they fall due. 

A company may also be considered to be insolvent if the value of its assets is less than the amount of its liabilities, taking into account contingent and prospective liabilities.

Covid-19 has introduced significant uncertainty to any assessment by directors about their company’s solvency.

The ferocious expansion of the shared office sector in recent years has caused a great deal of speculation about the long term viability of shared office accommodation as a business model.

In this insight, we look at how a shared office provider's insolvency might impact on its occupiers, depending on the insolvency process which is followed.

The shared office accommodation business model

The FCA, ICO and FSCS have released a statement warning licensed Insolvency Practitioners (IPs) and FCA-authorised firms to be responsible when dealing with personal data.

The statement highlights concerns about IPs/ authorised firms unlawfully selling personal client data to claims management companies (CMC) when acting on administrations.

On 4 December 2019, the Supreme Court handed down its judgment in MacDonald and another (Respondents) v Carnbroe Estates Ltd (Appellant) (Scotland) [2019] UKSC 57. The appeal concerned the interpretation of ‘adequate consideration’ under section 242 of the Insolvency Act 1986 (the “Act”) and the remedies that courts can apply if there is a gratuitous alienation, and inadequate consideration paid for the transaction in question.

Sheriff McCormick at Glasgow Sheriff Court has been asked to rule on this specific point in the recent case of Gary John Cook v The Accountant in Bankruptcy [2019] SC GLA 82, which he answered in the affirmative.

This is of particular relevance for trustees in sequestration when the debtor has paid into a pension scheme and is intending to apply for a drawdown of the proceeds from that scheme, following the appointment of the trustee.

The facts are fairly straightforward: